Sell Euros, Buy Yen: U.S. Treasury Secretary Vows Full Support for Japan

U.S. Treasury Secretary Benesent said Tuesday (4th) that the Trump administration will 'spare no effort' to support Japan in stabilizing its foreign exchange market, provided it benefits the U.S. economy.

In an interview with CNBC, he stated, 'We will do everything we can to support Japan, as long as it benefits the U.S. economy and American taxpayers.'

Benesent explained that the U.S. joined Japan’s joint intervention to strengthen the yen because prolonged yen weakness could destabilize markets across Asia and trigger competitive devaluations of other currencies, calling the situation 'very unhealthy.'

He emphasized, 'Given trade flows, economic scale, and Japan’s contribution to global savings markets, maintaining yen stability is crucial. The Japanese government understands this, and we are honored to work with Japan to implement policies that support regional stability.'

CNBC noted that this U.S.-Japan coordinated intervention is a rare move by Washington to support another major currency, highlighting concerns that prolonged yen weakness could worsen inflation in Japan, pressure other Asian currencies, and disrupt global markets.

As part of the joint action, the U.S. Treasury sold euros from its foreign exchange reserves and used the proceeds to buy yen. Benesent said he has informed European officials that the euro sale was merely a reallocation of reserve assets.

'In my view, the euro exchange rate is now closer to a more balanced level,' Benesent said. 'I won’t comment on where the euro should trade, but the real issue is that the yen is currently severely undervalued, and what measures the Japanese government is taking in response.'

However, Benesent also stressed that buying yen can only suppress market volatility in the short term, and Japan still needs fundamental policy adjustments to address the underlying causes of yen weakness.